The economic boom of the 90’s was fueled by the coming of age of the large Baby Boomer generation. The fortunes of brands depended on whether they pampered and kept Boomers happy enough to buy from them and keep coming back for more.
Today the Boomers are a fading generation, with most heading into retirement and the youngest of them starting to cut back on the discretionary expenses of their youth.
Move over Baby Boomers; the Millennials or Gen Y as they are sometimes called, are here.
The millennials are consumers who were born between 1976 and 1995 – people who are between 19 to 38 years of age in 2014. This generation is the largest population segment in the United States – even larger than the Baby Boomers were when they came of age. With 86 million millennials in our midst, they currently account for about 27% of the total population of the United States.
What Are They Like? – A Psychographic Profile
Millennials tend to respect authority, are great team players and seek social approval for day-to-day actions as well as large decisions. This is in stark contrast to the generation that preceded them – the Gen X-ers, who were largely seen as independent, brooding, loners that worked best when left alone.
Millennials tend to be more caring, politically involved and liberal about societal conventions than previous generations.
Research conducted by the Pew Research Center found that millennials are largely optimistic about the future, have higher education levels than all previous generations in the United States and crave constant appreciation and attention, thanks to being subjected to helicopter parenting.
What Do They Like To Do? – Media Habits & Leisure Activities
Millennials are the generation that grew up with the internet – constantly connected, they are often called ‘digital natives.’ This is the generation that was the first to catch on to almost every digital landmark there is – email, online chatting, mobile phone usage and text messaging, e-commerce, online dating, social networking and social sharing, you can go on and on.
They prize their technology chops and feel their comfort with technology sets them apart from previous generations. They also seek a good work-life balance unlike the workaholic Boomers and Gen X-ers.
Molly Soat from the American Marketing Association quotes some figures:
- 51% of millennials have an Instagram account and 42% use Snapchat.
- 31% of millennials post on Instagram on a daily basis, while 29% tweet every day.
- 72% of millennials plan to travel for leisure in 2014—compared with 48% of boomers—and 59% plan to spend more on travel in 2014 than they did in 2013.
In terms of media habits, millennials prefer to get their news primarily from the internet and TV.
What Are Their Motivations? – Aspirations & Drives
Three out of four millennials state a need for work-life balance as a big factor in their career choices. Though good team players, millennials seek constant encouragement and quick growth up the corporate ladder.
Ron Alsop from the Wall Street Journal paints millennials as frequent job hoppers who move from one employer to the next in search of job satisfaction, and good work-life balance.
However, the desire to be good parents, have a successful marriage or even help others in need, far outweighs career ambitions in millennials.
A study of ‘Political Influencers’ on millennials is eye-opening. The largest chunk – 61% – of all millennials claimed their parents’ political views were the biggest influences in their lives, followed by public leaders (19%), the media (12%) and lastly faith leaders and celebrities.
How Will Millennials Affect Businesses In The Future?
1. Economic growth
The Baby Boomers led to an average GDP growth of 3.4% per year in the 90’s. By the time millennials come into their own in terms of spending power, they can push GDP growth by at least #% or higher year on year.
2. Consumer spending
Christine Barton from the Boston Consulting Group puts the current consumer spending of the millennials at $1.3 trillion annually. As this generation matures, their spending is set to go up to $2.45 trillion annually by 2015, spurred along by the economic recovery.
3. Boost to the education sector
Millennials are already the most educated generation in the country. Jacqueline Doherty from Barron’s claims that the number of students enrolled in college in the U.S. climbed by 30% from 2000 to 2011. This number is only going to go up for the next 5 -10 years or so till all millennials are past college age.
4. Boost to the housing industry
An improving economy, dropping unemployment rates combined with an educated workforce will lead to more houses and apartments being purchased around the country.
5. Favor socially responsible brands
The clearly stated desires of millennials to help others and be more involved in the community will spill over into favoring brands that share their values and give back to society in equal measure.
6. Less likely to be swayed by ads
This generation grew up watching the consumerist boom of the 90’s. With their 24 X 7 access to the internet, social networks and tendency to research extensively before making any purchase, millennials are less likely to be swayed by ads as compared to Gen X-ers or Boomers.
7. Embrace technology in every way
These digital natives will demand that brands and media outlets embrace technology in every way possible. E-commerce, mobile commerce, digital marketing and a real connection with consumers via technology platforms; will move from being ‘good to have’ to being ‘must haves’ for any brand’s survival.
In Closing
Each generation cohort exerts huge buying power once they hit their prime. Once there, they continue to drive the spending patterns, are the largest chunk of the workforce, exercise political and economic clout on the rest of the country for at least a couple of decades.
Today, the millennials are at the cusp of beginning their reign on our businesses and our wallets. Understand them, be prepared for them and embrace their uniqueness with open arms to ensure your business sees real success in the next two decades (maybe more!). It’s going to be an enjoyable ride. Don’t just standby on the sidelines, jump into the fray and adapt your business to the realities of tomorrow’s consumer.